(Bloomberg) -- Air Liquide SA, the largest supplier of industrial gases, aims to spend billions of euros over the next ten years on hydrogen production to meet a surge in demand driven by a global shift to cleaner energy, its chief executive officer said on Wednesday.
The gas could account for 20% of worldwide energy consumption by 2050, with a market value of about $2.5 trillion, Benoit Potier told a French senate hearing on Wednesday. This means global investment of $5 trillion to $7.5 trillion, enabling carbon dioxide emissions to be cut by 6 billion tons.
“So it's huge,” Potier said. “We must therefore invest wisely.”
Europe sees the fuel as key to its future energy mix, and France in September unveiled a 7 billion-euro ($8.5 billion) plan to support hydrogen use. Producing clean hydrogen from water using renewable energy is costlier than using fossil fuels, however, meaning subsidies are needed to lower costs.
Potier said France's efforts were “a good start” and enough for the next two to three years but called for further help to scale up hydrogen technology, as well as a carbon price that would increase over time, in order to make investment calculations and justify hydrogen spending to shareholders.
Major development of hydrogen will take place between 2030 and 2050, he said, adding that Europe needs to invest in renewable energy to develop the industry and catch up.
Massive Investment
“There cannot be a clean hydrogen world without massive upstream investment,” Potier said. “Right now in Europe, we don't have enough renewable electricity to be able to develop hydrogen.”
Potier said the world is undergoing a “massive electrification” that will require “a lot more” power.
Europe lags the U.S., Canada, Japan and Korea on membrane electrolysis technology to extract hydrogen from water, and Air Liquide is seeking European chemists who could work in a consortium to “move this forward very quickly,” Potier said.
The cost of hydrogen using low-carbon and renewable electricity is forecast to fall as much as 60% over the coming decade, the Hydrogen Council says. By 2030, the technology will become competitive in uses such as trains, industrial heating, forklifts and heavy-duty trucks, the council projects.
Air Liquide now sells about 2 billion euros of hydrogen a year, according to Potier. It had total revenue of 21.9 billion euros in 2019.
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